ZCMI BUCKED U.S. TREND BY POSTING A PROFIT IN 1990

ZCMI not only weathered a year in which many retailers struggled just to survive, but managed to do "surprisingly well" in 1990, reporting profits in a year of record department store losses nationwide.

That's the way ZCMI Chairman Marvin J. Ashton and President Richard H. Madsen characterize last year, a year in which "America's First Department Store" - the title of a new book on the historic chain by Martha Sonntag Bradley - logged sales of $205.07 million, up from $194.48 million a year earlier.Net income for the 1991 fiscal year ended Jan. 31 was $522,000, down from $1.78 million the previous year. Per-share earnings were 24 cents, down from 83 cents a year earlier.

Cash dividends for the year remained at 60 cents, the same as the previous four years. Book value of shares was $23.95, down from $24.33. Total assets were $123.99 million, up from $119.86 million. Long-term debt was at $44.52 million, up from $39.22 million.

Last week, ZCMI directors declared a dividend of 15 cents per share on its common stock payable on May 24 to shareholders of record May 15.

During the past fiscal year, ZCMI capital stock, which is traded on the over-the-counter market, fluctuated in bid quotations from $13 to $15.50 per share. A year earlier, bid quotes for the stock ranged from $11.50 to $15.

In their letter to shareholders in the company's annual report, published this week, Ashton and Madsen say ZCMI "acted with characteristic confidence and determination" last year, choosing to grow despite the uncertain economy, emphasizing quality "despite the industry's wavering standards," and forged closer ties in the communities where it does business "even though corporations are becoming increasingly distant."

The two executives said experience has taught them that often the best tactic in uncertain times is to be assertive and create your own opportunities. To that end, ZCMI last year opened four new ZCMI II stores in Phoenix, one each in Provo and Las Vegas, and a smaller full-line store in St. George.

"Opening seven stores in 12 months with as few adjustments as we have made is an impressive achievement, especially when it is clear that this recent expansion represents only the completion of our first phase," the executives said.

Combined with renovation plans for many existing ZCMI stores - including the ZCMI Center in downtown Salt Lake City and the ZCMI Service Center - the effort, they said, has put the chain in a "solid position" for the rest of the '90s.

The past year, they said, has been one of highs and lows, challenges and opportunities, "but by every measure we know, this company has performed admirably . . . we feel extremely positive about our four-state operation."

Customer opinion is the single most important element for any service business, they said, and is the only gauge, other than sales, for measuring true success.

To that end, ZCMI has created local citizen advisory boards for the five regions it serves. The boards, in Salt Lake/Utah County, Southern Utah/Las Vegas, Northern Utah, Idaho and Arizona, will give the company closer ties to customers.

"By encouraging their input, ZCMI can take action based on what customers want rather than what we think they want," the executives said.